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The Spousal Support Advisory Guidelines

65 bytes added, 17:34, 24 July 2017
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==The views of the courts==
On 4 July 2005, the British Columbia Supreme Court released its first judgment considering the Advisory Guidelines, in the case of ''[http://canlii.ca/t/1l3x1 W. v. W]'', 2005 BCSC 1010. The judge said that the Advisory Guidelines "provide a cross check against the assessment made under existing law", and that the formulas provided in the Advisory Guidelines are "consistent with the law in British Columbia". She then made an order for spousal support using the Advisory Guidelines as "a check, " without expressly applying the Advisory Guidelines to determine the issue. The Advisory Guidelines, she held, is not law, and is not intended to become law.
On 19 July 2005, the court released its second judgment on the Advisory Guidelines, ''[http://canlii.ca/t/1l2x7 M.S. v. W.S.]'', 2005 BCSC 939. In this case, the judge held, rather emphatically, that the court is not bound by the Advisory Guidelines in determining spousal support and that "equitable distribution can be achieved in a variety of ways and need not be calculated according to a strict formula."
This view was softened later in 2005 by the Court of Appeal in the case of ''[http://canlii.ca/t/1lb8m Yemchuk v. Yemchuk]'', 2005 BCCA 406. In this case, the court held that the Advisory Guidelines reflects the general results seen in the case law on spousal support. While the court stopped well short of saying that the Advisory Guidelines must be used to determine spousal support, it did consider the Advisory Guidelines "a useful tool " and "a factor " to be considered in making an order for spousal support, and made an order for support that was within a hair's breadth of the numbers the Advisory Guidelines formulas produced.
===The state of the law in British Columbia===
The law in British Columbia, then, is that the results of the Advisory Guidelines calculations must be considered when making a decision on spousal support. The Advisory Guidelines is, in other words, all but mandatory in this province.
(Of course, this also means that lawyers must become proficient in using the Advisory Guidelines formulas or they risk giving their clients and the courts incorrect information. The Without Child Support calculations, discussed later, are not terribly complex, but the With Child Support calculations demand a basic knowledge of the federal and provincial benefits and credits relating to children, the different deductions that apply to employment and self-employment income, received versus taxable dividends, and a few other wrinkles relating to the calculation of after-tax income. Owning the software required to do the Advisory Guidelines calculations isn't enough. Lawyers need to know how to expertly use that software, with tax and income issues in mind, and the software has to do the math and actually perform those calculations correctly.)
===The law in other provinces===
==The formulas==
The [[Advisory Guidelines]] describes two basic formulas:
* One formula for when child support is not being paid (the ''Without Child Support Formula''), as might be the case if the couple have no children or if all of the children are adults and financially independent at the time of separation.
* Another formula for when there is a legal obligation to pay child support (the ''With Child Support Formula''), whether child support is actually being paid or not.
The Without Child Support Formula is fairly straightforward:
<blockquote>The '''amount''' of support is 1.5 to 2 percent of the difference between the parties' gross incomes for each year of marriage.</blockquote><blockquote><blockquote>''For example, say a relationship is 10 years long, and Party A has a gross income of $50,000 and Party B has an income of $20,000. The difference between the parties' incomes is $30,000. Party B would have share in the difference of 15 to 20 percent (1.5 times 10 and 2 times 10), or between $4,500 and $6,000 per year. On a monthly basis, support would be paid at $375 to $500.''</blockquote></blockquote> <blockquote>The '''The length of time''' support will be paid is 0.5 to 1 year for each year of the relationship. If a couple have been together for more than 20 years, or if the age of the dependant party plus the number of years of the relationship equals 65, support will be paid indefinitely.</blockquote> <blockquote><blockquote>''Using the same example, support would be payable for 5 to 10 years (0.5 times 10 and 1 times 10). If, however, the dependent party was 55 at the time of separation, support would be paid indefinitely (55 years of age plus 10 years equals 65).''</blockquote></blockquote>
The maximum amount payable under this formula ranges from 37.5% of the difference between the parties' gross incomes to 50% of the difference between the parties' incomes, net of taxes and benefits.
This formula is a lot more complex. In this formula, child support is taken out of the payor's gross income and the recipient's income, taxes are taken into account, and government benefits are added to the recipient's income. The reason why child support is deducted from the recipient's income is to reflect the <span class="noglossary">costs</span> that parents bears in raising the children.
<blockquote>The '''amount''' of support is 40 to 46% of the payor's individual net disposable income plus the recipient's net disposable income.</blockquote><blockquote>The '''payor's net disposable income''' is their his or her gross income, minus taxes and minus their his or her child support obligation, including the tax credits they receive he or she receives as a result of paying spousal support.</blockquote><blockquote>The '''recipient's net disposable income''' is their his or her gross income, minus taxes and minus their his or her notional child support obligation, plus any government benefits they receivehe or she receives, less the taxes payable as a result of receiving spousal support.</blockquote> <blockquote><blockquote>''Say the parties have an 8 year old child, the payor has a gross income of $50,000 and the recipient has an income of $20,000. The payor's net disposable income is $26,710 ($50,000 minus taxes of $15,570, minus annual child support of $5,112, minus EI deductions of $772, minus CPP deductions of $1,831). The recipient's net disposable income is $15,045 ($20,000 minus taxes of $4,410, minus notional child support of $2,052, minus EI deductions of $396, minus CPP deductions of $816, plus child tax benefit of $1,208, plus national child benefit of $1,511).''</blockquote></blockquote> <blockquote><blockquote>''The family's net disposable income is $41,755 ($26,710 plus $15,045). 40 percent of the net disposable income is $16,702; 46 percent of the income is $19,207. After deducting the recipient's net disposable income, the difference between the recipient's income and 40 percent of the family's disposable income is $1,657 per year, and $4,162 for 46 percent.''</blockquote></blockquote> <blockquote><blockquote>''On a monthly basis, spousal support would be between $138 and $346. The total the payor would pay each month would be spousal support plus $426 in child support.''</blockquote></blockquote><blockquote>The '''length of time''' for which support will be paid ranges from the longest of two formulas used to determine the low end of the range to the longest of two formulas used to determine the high end of the range. If a couple have been together for more than 20 years, or if the age of the dependant party plus the number of years of the relationship equals 65, support will be paid indefinitely.</blockquote><blockquote>The '''low range''' formulas for duration are:</blockquote>
<blockquote><blockquote>1) 0.5 years for each year of the relationship</blockquote></blockquote>
<blockquote><blockquote>2) the length of time remaining until the youngest child starts full-time school</blockquote></blockquote>
<blockquote>The '''high range''' formulas for duration are:</blockquote>
<blockquote><blockquote>1) 1 year for each year of the relationship</blockquote></blockquote>
<blockquote><blockquote>2) the length of time remaining until the youngest child finishes full-time school</blockquote></blockquote>
The factors this formula uses are:
*#the payor's gross income,*#the recipient's gross income,*#the length of time the parties lived together,*#the recipient's age,*#the number of children child support is payable for, and*#the number of years until the youngest child starts and leaves full-time school.
===The other ''With Child Support'' formulas===
The Advisory Guidelines describe a few other formulas that apply when:
*#all of the children are over the age of majority,*#the parents have split custody of the children,*#the parents have shared custody of the children,*#the children live with the payor, or*#the children are step-children to the payor.
These formulas use modified or hybrid versions of the Without Child Support and main With Child Support formulas.
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